Europe, still trailing Washington, should soon be lifting the anathema on bitcoin.
Bitcoin invites itself into the hemicycle
The United States has chosen its side and Sarah Knafo took charge of making this understood to the European Parliament. The MEP did not mince her words, calling for an end to the technocratic crusade against bitcoin:
“Donald Trump will create a strategic reserve of bitcoins for the United States. Jerome Powell, the chairman of the US Federal Reserve, is now talking about digital gold. Bitcoin is exploding and, meanwhile, what is the European Union doing? She squanders the money in incredible mismanagement. It continues to accumulate tragically inflationary deficits. It persists in regulating, taxing, slowing down”she said.
Sarah Knafo calls for Europeans to imitate the United States so as not to have the rug pulled out from under them:
“It is time to protect our people from inflation as well as bad economic choices. […] It is time for our states to establish strategic national bitcoin reserves. It is time to develop the bitcoin industry, and we, French, have the cards in hand thanks to our nuclear asset.
Let's stop taxing bitcoin holders ever more. It was their intelligence, their risks, their sleepless nights that constituted their savings. Let them protect themselves from the crazy spiral you have created. Public deficits which push for monetary creation at the origin of inflation which leads to chaos […]. »
Things are also moving in Germany. Former Finance Minister Christian Lindner criticized the government's attitude towards bitcoin in front of a packed Bundestag:
As a reminder, a few months ago Germany sold off more than 50,000 bitcoins at an average price of $54,000. “What a missed opportunity”said C. Lindner.
This is all the sadder since Germany has huge surpluses of intermittent electricity which could be put to use by mining bitcoins. This financial windfall would not be too much to finance the energy transition.
Small downside
The French MP's speech is a breath of fresh air, but we should also not believe that bitcoin is a silver bullet against inflation.
It is true that wasting tens of billions on almost useless vaccines is inflationary. However, overall, deficits are primarily a symptom of a lack of energy.
The monetary system is what can be described as Ponzian debt requiring a constant increase in the energy supply that underpins economic growth. Unfortunately, the opposite is happening:
Truth be told, we got into trouble well before 2007. From 1971, the annual growth rate of oil production fell from 7% to 1%. It was from this pivotal period that the rise in living standards began to slow down.
Bitcoin does not provide a solution to the energy decline. The blockchain does not contain oil, lithium or uranium 235. It is the best store of value in the history of humanity, which is also accessible to everyone, and that's already not bad, don't you think? Don't ask for too much.
The possibility of creating money ex nihilo is the cornerstone of civilization, but we must be able to put energy into facing this ponzi. Otherwise what? Inflation.
Our physical pitfall has only two possible outcomes. Inflation (real interest rates become permanently below zero) or default (a part is not repaid), which amounts to the same thing. Unless you find the energetic philosopher's stone or a stargate leading to other planets.
History shows that it is better to roll perpetual debt. The problem is that inflation unduly benefits those who own scarce assets (prestigious real estate, art, stock market shares, etc.). That is, those who are already rich.
Bitcoin puts an end to this privilege. It is also a potential international reserve currency that can offer a way out of geopolitical tensions.
As such, don’t miss our article: “Trump between the Dollar and Bitcoin”.
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